IFRS for SMEs
The IFRS for SMEs Webcast presented on 10 September is now available to access.
The recorded sessions can be viewed via the following links:
Current due process step
The current due process step is Board re-deliberation of the proposals in the Exposure Draft (ED) of an International Financial Reporting Standards for Small and Medium-sized Entities (IFRS for SMEs) that was issued in February 2007.
The comment period for the ED ended 30 November 2007. The Board received 162 letters of comment on the ED. Staff completed analysis of the comments presented that analysis to the Board in March 2008.
116 small entities from 20 countries participated in ‘field testing’ the ED by restating their most recent annual financial statements following the proposals in the ED and reporting any problems encountered. Staff has completed an analysis of the field test results and presented that analysis to the Board in April 2008.
The Working Group (WG) met on 10-11 April 2008 to review the comments on the ED, the field test results and staff recommendations. The WG recommendations for changes to the proposals in the ED were submitted to the Board in May 2008 (all recommendations other than disclosures) and in July 2008 (recommendations relating to disclosures).
Staff presented its initial recommendations for changes to the ED to the Board in May 2008. At that meeting, the Board began its re-deliberations of the proposals in the ED. Those re-deliberations continued at the Board meetings through April 2009.
Estimated project completion
Staff submitted a ballot draft of a final IFRS for SMEs to the Board on 1 June 2009. The final standard is expected to be published around the first week of July 2009.
Why is the IASB undertaking this project?
Because full IFRSs were designed to meet the needs of equity investors in companies in public capital markets, they cover a wide range of issues, contain a sizeable amount of implementation guidance and include disclosures appropriate for public companies. Users of the financial statements of SMEs do not have those needs, but, rather are more focused on assessing shorter-term cash flows, liquidity and solvency. Also, many SMEs say that full IFRSs impose a burden on them — a burden that has been growing as IFRSs have become more detailed and more countries have begun to use them. Thus, in developing the proposed IFRS for SMEs, IASB’s twin goals were to meet user needs while balancing costs and benefits from a preparer perspective.
Project objective
The objective of this project is to develop an IFRS expressly designed to meet the financial reporting needs of entities that (a) do not have public accountability and (b) publish general purpose financial statements for external users. Examples of such external users include owners who are not involved in managing the business, existing and potential creditors, and credit rating agencies. The IFRS for SMEs will be derived from full IFRSs with appropriate modifications based on the needs of users of SME financial statements and cost-benefit considerations.
Is this project part of the Memorandum of Understanding?
No. The MoU sets out a Roadmap of Convergence between IFRSs and US GAAP 2006-2008. US GAAP does not have a separate financial reporting standard for SMEs.
Click here for more information on the MoU.
Project history and due process steps completed
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March 2008 through February 2009 |
Redeliberation of proposals in the ED |
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November 2007 |
Deadline for comments on the ED and completion of the field tests. 161 letters of comment were received, and 116 SMEs from 20 countries participated in the field tests. |
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June 2007 |
IASB launched a comprehensive programme for field testing the proposals in the Exposure Draft |
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February 2007 |
Exposure Draft of an IFRS for SMEs issued for public comment |
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January 2006 |
The Working Group reviewed a complete draft of the ED and made over 80 recommendations. About 75% of those were implemented in the published ED |
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October 2005 |
Public round-table meetings on possible recognition and measurement simplifications (13-14 October 2005) |
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April 2005 |
Staff Questionnaire on Possible Recognition and Measurement Modifications for Small and Medium-sized Entities (SMEs) |
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June 2004 |
Discussion Paper, Preliminary Views on Accounting Standards for Small and Medium-sized Entities |
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September 2003 |
Survey of World Accounting Standard-setters |
Discussed by the Board at 44 public Board meetings (through April 2009).
Discussed by SAC at 7 SAC meetings.
Working Group
The Board has formed a Working Group whose members provide views and comments on specific issues that are presented to them.
The Working Group has met:
- 23 April 2003
- 29-30 June 2005
- 30-31 January 2006
- 10 - 11 April 2008